Mutual assent is the foundation of every express contract and amendment, whether it is formed offline or online. While parties to an offline contract may put signatures to paper to demonstrate their mutual assent to the terms of the contract, online contracts require a different means of signalling assent.
Online contracts fall into three categories, based on how the user indicates his or her asset to the terms and conditions proposed by the website operator: (1) clickwrap agreements; (2) shrinkwrap agreements; and (3) browsewrap agreements. Each category of online agreements is treated differently by the courts.
Often, the user of a website is asked to read a set of terms and conditions governing use of the website and then asked to expressly agree to those terms and conditions before making a purchase or obtaining the service offered by the website. Agreements entered into in this fashion are referred to as "clickwrap" agreements because the user typically indicates his or her agreement to the terms and conditions by clicking a button, hyperlink, or checkbox marked "I agree." Clickwrap agreements are generally enforceable.
Shrinkwrap agreements are named for the license agreements contained in the packaging of commercial software products. Online, these contracts provide notice that continued use of the website or certain other conduct will constitute the user's agreement to the terms and conditions proposed by the website operator. Such agreements are enforceable, if proper notice is provided to the website user.
In some instances, websites contain terms and conditions which purport to bind any user who visits the website, without any other manifestation of affirmative agreement by the visitor. While notice of the terms and conditions usually appears on the website, the user is not required to view the provisions of the "agreement" or to undertake any affirmative action indicating an agreement to those terms. Most courts are hesitant to enforce these agreements.